One former director of failed finance companies Viaduct Capital and Mutual Finance has been jailed, and two others have been sentenced to home detention, the Financial Markets Authority (FMA) says.
Paul Bublitz was found guilty of four charges of theft by a person in a special relationship and two charges of false statement by a promoter. He has been sentenced to three years two months imprisonment for each charge, which will be served concurrently.
Bruce McKay was found guilty of three charges of theft by a person in a special relationship. He has been sentenced to 12 months home detention for each charge, to be served concurrently.
Richard Blackwood was found guilty of four charges of theft by a person in a special relationship. He has been sentenced to nine months home detention for each charge, to be served concurrently.
Both Viaduct Capital and Mutual Finance went into receivership in 2010 with Viaduct owing investors $7.8 million, and Mutual $9.3 million. See more detail in our Deep Freeze list here. The FMA charged the directors in 2014. The FMA notes the case involved abuse of the Crown Retail Deposit Guarantee Scheme resulting in taxpayers meeting substantial costs and losses.
“This was a difficult and complex case, which took considerable time and resource to investigate and prosecute. However, such was the cynical and egregious nature of the misconduct, the defendants had to be held to account for their actions," FMA general counsel Nick Kynoch says.
Here's the FMA's full statement
Trio sentenced for theft, false statement by a promoter in Viaduct Capital & Mutual Finance case
One man has been jailed and two men sentenced to home detention at the Auckland High Court for their part in using finance companies to try to save commercial businesses during the global financial crisis.
Paul Bublitz was found guilty of four charges of theft by a person in a special relationship and two charges of false statement by a promoter. He was sentenced to 3 years two months imprisonment for each of the charges, to be served concurrently.
Bruce McKay was found guilty of three charges of theft by a person in a special relationship. He was sentenced to 12 months home detention for each charge, to be served concurrently.
Richard Blackwood was found guilty of four charges of theft by a person in a special relationship. He was sentenced to 9 months home detention for each charge, to be served concurrently.
The verdicts were delivered by Justice Toogood on the 5th February 2019. A copy of the verdicts and reasons can be found here.
A fourth man, Peter Chevin, pleaded guilty to charges under the Crimes Act in 2016 and was sentenced to 9 months home detention in March 2017.
Nick Kynoch, Financial Markets Authority (FMA) General Counsel, said: “This case involved theft and deliberate misconduct in dealing with funds invested by the public. It also involved abuse of the Crown Retail Deposit Guarantee Scheme, which resulted in the taxpayer meeting substantial costs and losses.
“This was a difficult and complex case, which took considerable time and resource to investigate and prosecute. However, such was the cynical and egregious nature of the misconduct, the defendants had to be held to account for their actions. The FMA would like to acknowledge the support of the Crown Solicitor in being able to do so.
“This case shows how complex and difficult it can be to investigate and prosecute so-called ‘white collar crime’. This was criminal activity that affected not just the investors, but also taxpayers.
“It involved misleading investors, with false statements in the prospectus, as part of a deliberate plan designed to funnel investors funds, and ultimately taxpayer funds, to support Mr Bublitz’s failing commercial enterprises. We are pleased that today sees the defendants being held to account for their actions.”
In 2017, the Trustee of Viaduct Capital Limited, Prince and Partners, admitted a series of failings in its role as trustee. Civil proceedings brought by the FMA under Section 34 of the FMA Act were settled for $4.5 million. More details on this are here.
3 Comments
Over the p;ast 10+ years the courts have imposed more than 150 years of jail time for these types of crimes. It is far from rare.
Meanwhile a benefit fraudster is jailed 3 years 3 months for stealing $355k over 20 years. Now I get that this benefit fraud was prolonged, but the losses to the taxpayer were considerably less yet she receives effectively the same amount of jail time.
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